Will IPSO’s arbitration scheme bankrupt newspaper publishers?

The launch of IPSO’s compulsory arbitration scheme means that anyone with a suitable claim can take legal action against the seven best-selling national daily newspapers and eight best-selling Sunday newspapers in the UK – and the publisher has no choice but to arbitrate, writes IPSO chief executive Matt Tee.

The scheme covers claims like libel, invasion of privacy, data protection and harassment and includes a higher level of damages, meaning claimants can now be awarded up to £60,000.

But will this open the floodgates to compensation claims which could put newspapers out of business?

Improving the public’s access to justice through low-cost arbitration was a recommendation of the Leveson report and IPSO has run a voluntary scheme for the last 18 months, with very little take-up.

But earlier this year, IPSO and all of the national newspapers which it regulates agreed that it should offer a compulsory version of the scheme.

Publishers in the compulsory scheme must agree to enter arbitration if a claimant chooses this means of dispute resolution rather than going through the courts.

If a claimant has a suitable legal claim and wants to arbitrate, one of a panel of arbitrators – all of them highly respected and experienced barristers – will consider evidence from both sides and adjudicate.

For the claimant, it means lower costs – a maximum of £100 fees – and no need to instruct a lawyer.

For the publishers, who will bear the large part of the arbitration costs, there is the opportunity for swifter resolution than usually would be the case and lower costs than in a case where both sides instructed lawyers or went to court.

For both sides, where lawyers are involved, there are cost caps, and there are very limited circumstances in which the publication could recover their costs or arbitration fees from the claimant.

IPSO receives 15,000 or so complaints a year. So if each complainant is awarded £60,000, some publishers are going to be in financial difficulties very soon aren’t they?

The vast majority of people who contact IPSO are complaining about the content of a news story. Most complainants are not seeking compensation, they just want the record set straight.

They believe an article is inaccurate, discriminatory or otherwise in breach of the Editors’ Code of Practice. They usually want the story removed or corrected and an apology issued where appropriate. IPSO can insist that its adjudication is published.

While the option of low cost arbitration might encourage a few more complainants to seek compensation there still needs to be a legal basis for any claim. In many cases, there is no possible cause for action for a breach of the Editors’ Code.

Even where there is a potential overlap – for example in Clause 1 (accuracy) complaints where a person’s reputation has been damaged, or Clause 2 (privacy) complaints – most will chose to make their complaint under the Editors’ Code rather than use the law.

Compensation via compulsory arbitration is one component of IPSO’s remit as press regulator, an extra string to its bow.

Yes, publishers will be subsidising the costs of individuals seeking compensation but even if they occasionally fall foul, they should receive several benefits: lower legal costs, increased trust and confidence from the public and a receding threat of state-led media regulation.

Far from putting newspapers out of business, it might even help them build trust and keep more readers.

Find out more information about the IPSO arbitration scheme at ipso.co.uk/arbitration.

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